Amazon’s Hardware Isn’t About You, and That’s the Problem

Ariel Zambelich/WIRED

The Wall Street Journal reports that Amazon has laid off “dozens” of engineers in Lab126, home to its hardware division, scaling back current offerings and abandoning some future projects. It’s understandable, because many of Amazon’s hardware products lack wide appeal. It’s also a shame, because nearly all of them would have it if Amazon focused more on consumers, and less on consuming.

Amazon hasn’t confirmed the report, and declined our request for comment. What’s certain at the very least, though, is that the company’s Fire Phone, which debuted last year to critical panning and consumer shrugs, has run its course. After a recent slate of, er, fire sales, which brought the effective price of the smartphone (after an included year of Amazon Prime and other extras) as low as $10 (yes, 10 bucks), it’s out of stock and unlikely to return. It also appears to have been removed from a list of a Lab126 VP of product development Paul Gojenola’s responsibilities as of June, per his LinkedIn profile.

The Fire Phone may be Amazon’s most high-profile hardware flop, but the core reasons for its failure apply across many of the company’s products. Simply put, Amazon produces hardware that’s designed to help Amazon sell things, often at the detriment of the overall user experience. And while all devices are ultimately a means to an end, the question is: whose?

Fire’s Out

Plenty was written about what the Fire Phone got wrong when it was released, but it might be even more helpful to unpack what it got right. Or rather, what it almost got right.

“I like many of the ideas that they were proposing on the device itself,” says Gartner analyst Tuong Nguyen. “Ideas such as using visual identification to identify and buy things, that’s something I want to see more of in the future across a range of devices.”

The Fire Phone’s visual acumen was incredibly impressive. There’s something magical about a phone that knows what’s going on in the world around it, that can tell different flavored bags of Popchips apart. So clever, such engineering acumen! And yet there’s also something so reductive about using that magic to convert sales for Amazon.com. As Tim Moynihan put it in WIRED’s review from June of last year: “In the world of [Fire Phone], everything around you exists to be bought on Amazon.” What a depressing thought.

More damning for Fire Phone, though, is that look-and-buy turns out not to be a particularly compelling marquee feature. Those same smarts are available on iOS and Android as well through an app called Flow. Flow has fewer than 100,000 Android installs, according to its listing on the Google Play Store. Amazon Prime Now, publicly announced just this week, has already garnered over 500,000. Amazon Kindle? Over 100 million.

Another factor that should have worked in Fire Phone’s favor was its price. Amazon has built a reputation on affordability, and once you read the fine print, its smartphone was no different; an included year of Amazon Prime made it essentially $100 on-contract for a 32GB handset. You had to dig, though, to realize the full value; the phone was listed as $200, which was the only number most people saw.

“They priced it like an iPhone,” says 451 Research VP Kevin Burden. “They priced it at a premium phone level, which makes people think it should perform like an iPhone, and people who buy it should expect it to be the same type of status symbol as an iPhone. That certainly wasn’t the case.”

Besides which, even the “discount” wasn’t entirely selfless. It seems likely that Amazon expected the Prime memberships to pay for themselves in the long run. A January report (.pdf) from Consumer Intelligence Research Partners indicates that Prime members spend $875 more per person per year than non-Prime Amazon shoppers.

A smartphone’s success or failure hinges on one central question, says Nguyen: “What can this device do for me that my current device can’t do already? And does it do it so much better that I’m willing to drop the device I have now and get it immediately?”

Fire Phone inarguably let you buy things from Amazon faster than you current device can. Clearly, that wasn’t enough to get people to drop their devices. Which is telling, and unfortunate, because that’s also what drives the bulk of Amazon’s hardware lineup.

Amazon’s Prime Target

Look at any device in Amazon’s expanding arsenal, and you’ll see an array of products that all point directly back to Amazon shopping carts, with varying degrees of window dressing. The range can be best illustrated by two of the most recent releases. Echo, a voice-activated Bluetooth primarily serves up music, news and sports updates, and answers to trivia questions, but can also be used to add to shopping lists or to order items. At the other end of the spectrum lurks the Dash Button, which has the sole function of requesting Amazon deliveries of specific items with a single tap.

Those extremes bookend a mushy middle of ebook readers, tablets, and a set-top box, each of which share plenty of DNA with the Fire Phone: They provide solid hardware, reasonable pricing, and direct windows into Amazon’s near-infinite storefront. These are all good things—or at least, not inherently bad things. People like to shop, after all, and taking the friction out of that process benefits everyone involved.

Amazon was hoping that consumers would look at its hardware and say, ‘This is going to be a better way to consume Amazon services, I’m going to be able to buy things a lot easier on these pieces of hardware.’

This works particularly well on Amazon’s original hardware effort, the Kindle, in part because it benefits from both a singular focus and a streamlined interface.

“The Kindle’s a very basic, straightforward device,” explains Nguyen. “Oh, you like to read books? Here’s something that’s thin, light, that lasts almost forever, and it’s easy to use. That’s the appeal there… It serves its purpose very, very well, at a very reasonable price point.”

Even the Kindle, though, suffers from Amazon’s closed, retail-focused system. When Amazon gets into its seemingly regular spats with publishers, Kindle ebooks have faced either inflated prices or lack of availability. Like its only real rival, Kobo, Kindle uses DRM on titles you purchase directly. Unlike Kobo, Amazon substantially limits the number of file formats compatible with its devices.

Kindle Fire tablets work well and are significantly cheaper than the iPad, but they too are built around the premise that you want to purchase Amazon products and use Amazon services.

“Amazon saw Kindle Fire as a piece of hardware that could deliver a direct portal into its services,” says Burden. “That’s what Amazon got out of it. So let’s deliver this tablet at a price point that could make people say ‘I don’t feel like spending this much money for an iPad, let’s see how this Kindle Fire works.’”

Again, there’s nothing wrong with this; many companies create products that ultimately point back to themselves. Apple wants you to use iTunes and the App Store; Google wants you to use its services, but honestly just the Internet in general will suffice. The difference, though, is that dedicated Amazon hardware doesn’t make buying from Amazon that much easier; it just makes the opportunities more obvious.

“I think we can say that consumers are a little bit too smart,” says Burden. “Amazon was hoping that consumers would look at its hardware and say ‘This is going to be a better way to consume Amazon services, I’m going to be able to buy things a lot easier on these pieces of hardware.’ When the reality was, most consumers are smart enough to realize that regular hardware—whether a PC, a laptop, and iPhone, or an Android phone, it was just as easy.”

Amazon’s Fire devices (both phone and tablet) also come with plenty of trade-offs for that price and supposed shopping convenience, including a user interface that’s at times inconsistent, and no ready access to Google apps and services.

The company’s Fire TV set-top box, meanwhile, offers a healthy array of apps and gaming but prioritizes Amazon Instant Video in its innovative voice search. As Recode and others have found, selections that might be free elsewhere are buried in favor of a paid Amazon version, while as recently as April, it didn’t return results for Netflix at all.

All of which brings us back to Nguyen’s benchmark for success: What does a device do that mine can’t do already? And how much better can it do it?

“The big question becomes, should Amazon really be in the hardware business at all?” asks Burden. “Or should they focus more on good experiences on mobile devices in general, not necessarily dedicated hardware? There’s probably a case to be made around that.”

Burden points to Microsoft, which intends to make its Cortana virtual assistant available on both Android and iOS devices, rather than a Windows exclusive, because it values having consumers using its backend services above squeaking out increasingly slim hardware margins. Nguyen also questions whether Amazon truly wants to be a “box maker,” rather than just driving people to its core business however it can.

But Amazon already has perhaps the strongest cross-platform presence of any tech company right now; it’s unclear what pushing even further into iOS and Android would entail, or how much further it could push. And while it may not ever be a box maker, it’s demonstrably capable of making pace-setting devices, like the Kindle, and taking innovative (and, at least in my house, increasingly indispensable) leaps, like the Echo.

So perhaps it’s better to read what appears to be a Fire Phone retreat as a hopeful sign that Amazon recognizes that its devices need to be more than just storefronts, and that gimmicks don’t play nearly as well as usability. The Wall Street Journal report goes on to say that Lab126 still has plenty in the works, including a kitchen computer that doubles as a smart home hub. In fact, it sounds a lot like Echo, with a more traditional user interface. If so, I can’t wait to try it.

It’s also apparently responsive to voice commands, which the WSJ helpfully explains could be used for, “tasks like ordering merchandise from Amazon.com”

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